Loophole for IRS Educational Reimbursement Maximum
nass28
1 Post
I am aware that the IRS establishes an annual cap of $5,250 for educational reimbursements to be considered non-taxable income. I also know about the exclusion from this cap for education which qualifies for the "working condition fringe benefit" exclusion. Does anyone know of a loophole to this stated maximum for the benefit to be considered non-taxable which states that if the payment goes directly to the school and is not a "reimbursement" to the employee, the full amount of tuition can be considered non-taxable?
Comments
i aint no tax expert but i doubt there is a loophole like the one you describe. but i believe there are cases that tuition help can be treated as non-taxable income above $5,250.
see this irs pub
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$5,250. If your employer pays more than $5,250 for educational benefits
for you during the year, you must generally pay tax on the amount over $5,250.
Your employer should include in your wages (Form W-2, box 1) the amount that you
must include in income.
condition fringe benefit. However, if the benefits over $5,250 also
qualify as a working condition fringe benefit, your employer does not have to
include them in your wages. A working condition fringe benefit is a benefit
which, had you paid for it, you could deduct as an employee business expense.
For more information on working condition fringe benefits, see Working Condition Benefits in chapter 2 of
Publication 15-B, Employer's Tax Guide to Fringe Benefits.